EBRD support for Turkish agriculture tops €1 billion

By Olga Rosca
@olgarosca

EBRD support for Turkish agriculture tops €1 billion

Türkçe çeviri

The EBRD’s support for Turkish agriculture has exceeded €1 billion, the Bank announced at a conference in Istanbul today.

The EBRD, a leading institutional investor in Turkey, has financed over 32,000 agricultural businesses across the country.

Turkey is the world's seventh-largest agricultural producer and a major exporter. Agricultural production is a key sector of the Turkish economy and accounts for 20 per cent of the country’s employment. It is essential for economic growth and rural development.

Jean-Patrick Marquet, EBRD Managing Director for Turkey, said: “The EBRD has passed an important milestone in Turkey. The Bank’s finance worth over €1 billion – provided directly and through Turkish banks –has benefited tens of thousands of agricultural businesses, often in some of the most remote areas of Turkey. It has created employment, enhanced competitiveness and boosted economic growth.”

The EBRD believes that successful economies should be competitive, well-governed, green, inclusive, resilient and integrated. The Bank is working with the Turkish authorities to help develop policies that would make Turkish agribusiness more open, efficient and competitive.

To date, the EBRD has provided over €500 million in direct financing to almost 30 companies, ranging from family-owned businesses such as pulses and rice producer Yayla Agro and soft-drinks maker Uludag to large industry players such as commodities processor Tiryaki (in which the Bank is a shareholder).

In addition to direct lending, the EBRD has partnered with nine Turkish banks – Akbank, Denizbank, Garantibank, Isbank Sekerbank, TEB, TSKB, Vakifbank and Yapi Kredi – to channel financing worth €600 million through the lenders’ countrywide networks.

The partnership has helped the EBRD reach micro, small and medium-sized enterprises across Turkey, especially in the agricultural south-east, and has encouraged commercial banks to prioritise lending to agricultural clients and develop new ways to better meet their needs.  

With grant funding from the US government and the European Union, the EBRD together with partner banks has developed an innovative system called the Client Assessment Programme (CAP) to evaluate loans in agriculture. The tool covers all commercially viable crops and animal products and helps lenders better assess risks, process loan applications faster and expand access to finance for smaller companies.

Launched in the wake of the global financial crisis, CAP was instrumental in minimising the impact of the crisis on Turkish agriculture, a sector generally considered to be risky.  

A proven success, CAP is now being taken over by Turkey’s credit information bureau, KKB, under the name of TARDES and will be offered for use to all banks in the country.

The EBRD started investing in Turkey in 2009 and currently operates from offices in Istanbul, Ankara and Gaziantep. The country is a top destination for the Bank’s finance, with €1.9 billion invested in 2016 alone. To date, the EBRD has invested over €9 billion in Turkey through more than 220 projects in many sectors and has mobilised nearly €20 billion for these ventures from other sources of financing. Some 98 per cent of the Bank’s investments in Turkey are in the private sector.